Well, seems to be both, plus the odd HIPAA violation (one wonders how he missed out on the jaywalking).

Turns out, he's accused of trying to fool an insurance company into paying a fraudulent disability claim [ed: and look at that - it's still Disability Insurance Awareness Month! Go us!], so that covers the insurance part.

Aside from that, two women claim to have slept with him for money (wait, did he get that from the DI carrier?).

The article also mentions that he's "a long-time financial adviser;" given that at least two insurance carriers have fired him, and the DOI is apparently looking to suspend his license, seems like the SEC folks will soon be taking their bite, as well.

Thursday, May 30, 2019

Recently, a friend of mine attended a post-retirement financial planning seminar, at which was touted a way to use one's life insurance as a "living benefit" (no, not that kind of living benefit).

The idea goes something like this(all numbers in this example are for illustrative purposes only):

One
buys a single pay Whole Life (WL) insurance plan, depositing $100,000,
which purchases s $200,000 death benefit. One then waits a few years for
the surrender period to end, and then "withdraws" [ed: we'll circle back to this]
$75,000, leaving $25,000 of the original premium in the plan. This
reduces the death benefit to $125,000. When one's time comes to exit
this mortal coil, one's beneficiary still gets $125,000 ($200,000 -
$75,000). Nice return: $125,000 benefit check for $25,000 net deposit
(5:1). My friend wanted to understand why a carrier would agree to this, and I agreed to look into it, as a result of which I have some concerns.

Here’s what I think would actually happen:

As a single pay plan, it's automatically considered a Modified Endowment Contract (MEC).

In other words, the money coming out of such a plan would be on a LIFO (last in, first out) basis, so when one pulls out that $75,000 at least some of that is taxable as income (and depending on age, may be subject to a 10% penalty). Also, that $75,00 is not a "withdrawal," it is a loan, and most companies charge 7% or 8% interest on outstanding loan balances (and that’s on the whole $75,000).

Ouch.

But what does that mean "in real life?"

I ran a Single Pay WL quote with our primary carrier (figuring it would be pretty industry average) as a baseline.

The surrender charges went away by year 5, at which point cash value was $103,000, so about $3,000 growth, so maybe a $300 penalty. Not really hateful.

But: the whole $75,000 is a loan, and the interest on that is 8% (I presume that's fairly common). So the interest charged is $6,000.

Per year.

Every year.

Here's where it gets "fun:"

If one is smart, one is paying that $6,000 every year so that the loan doesn't snowball. In about 12 years (maybe less), one has just paid the carrier back the $75,000 (in $6,000 per year increments), and still has to keep paying. We call that "in the hole."

Or, perhaps one decides not to pay it, and the carrier deducts the $6,000 from the remaining cash value (remember: that's about $25,000). That's gonna go away pretty fast, no? And then one has nothing.

No, wait: one still has the $75,000 one took out (and paid some taxes on) . After giving the carrier $100,000 of one's own money.

But this particular iteration has some novel twists, and I'm not so sure it's completely off the charts. A friend who's familiar with it suggested that I reach out to Lafayette Life, which apparently markets a plan that could (does?) serve as a platform. I have yet to hear back from them, but will update this post when (if) I do.

Meantime, I would very much appreciate any thoughts our readers might have on this.

The Tiffany Network also says that the average diabetic currently spends upwards of $500 a month on insulin (although they offer no insight as to how they arrived at this figure, other than it was reported to them by the Health Care Cost Institute). They also don't say how much the average diabetic actually pays for the med (this is an important, and generally unremarked upon, distinction).

While one's first reaction is likely applause, it should actually give one pause. As a longtime correspondent in Colorado notes in email:

"Recently our governor in Colorado signed a bill restricting copays on insulin to $100 monthly. Comments about this universally demagogue President Trump, blaming high prices on him. And a tv reporter did a completely uncritical segment on it. I wrote to him and told him that price controls create shortages, etc. But this won't work the usual way, because it is with an insurance company, not a retailer. I told the reporter that the insurance company may just raise premiums for everyone to make up the difference. Or they could pull out of the Colorado market."

I would quibble only with the "may" raise premiums: count on it.

It's also worth remembering that, while Colorado may be the first state to cap co-pays on insulin, they're far from the first to dabble in rx cost controls. From almost 4 years ago:

"Why did Governor Polis choose diabetes as his target to reduce to costs? There are plenty of other chronic diseases out there that have attached meds to manage the disease. So why do diabetics get a break, but others don't? Does he want to buy the votes of diabetics?

Perhaps insulin is just a trial balloon to see how this flies and then move on to all meds."

This is an excellent point.

And it gets even better (for certain values of "better"):

"Let's play a game. What would happen if he capped the co-pay on all meds? And what if that co-pay was $1.00? It is easy to see that this would be so expensive, insurance companies would have to make it up in premiums. When premiums go up, the governor will have to create a new program to help subsidize them. So then he gets to buy the votes of those he is subsidizing, while calling the insurance companies evil."Pitch. Perfect.

I responded that this echoes the minimum wage "debate:" why $15 an hour? Why not $25? Or $50? Or $1,000? Each is equally defensible, no?In any event, will be interesting to see how the co-pay cap works out in Colorado.

Tuesday, May 28, 2019

As I'm sure most have heard, our little corner of paradise was slammed with multiple tornadoes last night. Miraculously, there don't appear to have been any fatalities, but there is significant property damage (as one would expect).

We've been asked to pass along the following urgent suggestion from out primary carrier:

"Tell insured's not to sign any contracts with door to door contractors. If you need to get in contact with [your adjuster] you can call her on her cell phone."

Do you know what Canadian single payer covers and doesn’t cover? By BFF lives in Ontario. They don’t cover mental health care, medications, vision, or dental. There are waiting lists for Drs, specialists, and surgeries/treatments that can be deadly. https://t.co/xF2Ctu9pDE

Tuesday, May 21, 2019

A while back, our Jack Russell-mix puppy had knee surgery, and the doc prescribed 4 (yes, four - I told you she's a Jack Russell-mix) meds for her. Buying them from the vet got expensive pretty quickly, and they recommended the folks at GoodRx. This is a site (and an app) where you can procure coupons for various meds, often saving significant dollars.

This helped a lot with Maddie's meds, and we've since used it for our own. It's easy and efficient, and even better, it's free.

The Sesamecare site takes the reduced-fee, cash only model and expands it to include primary care and dental visits, eye exams and MRIs, and other services. According to the site, over 100 providers offer over 600 services, from OB-GYN to dermatology, even cardiology services. Pretty expansive.

And of course, since patients know the price of services upfront, and there's no insurance involved, there's no worry about what they will ultimately cost.

Unlike Direct Primary Care or sharing ministries, these services will generally be HSA-eligible, which also helps to offset the fact that there's not going to be much (if any) insurance reimbursement (depending on whether your plan is a PPO or an HMO).

So far, the service is available only in Kansas City [ed: I've heard that everything's up to date there], but perhaps we'll eventually see it rolled out in other markets.

Thursday, May 16, 2019

So the great state of Washington has passed legislation implementing what appears to be the first "Social-Insurance Program for Long-Term Care" in the nation.Cool.But what, exactly, does that mean?Well first, let's look at what this plan isn't:It is not an individually owned, Partnership Compliant long term care insurance plan (it's not, in fact, 'long term care' coverage at all, but we'll circle back to that). That's not to say it's evil, fattening or carcinogenic, just noting its limitations.On the other hand, it's also not the late, unlamented CLASS Act, so it actually seems to have some decent value, especially relative to cost.Okay, that's nice, Henry, but what is it?Pretty simple, really:"All residents will pay 58 cents on every $100 of income into the state’s trust. After state residents have paid into the fund for ten years—three if they experience a catastrophic disabling event—they’ll be able to tap $100 a day up to a lifetime cap of $36,500 when they need help with daily activities such as eating, bathing, or dressing."That is, they'll be eligible to receive up to a year of extra help with common tasks (assuming care costs $100 a day, and this amount increases each year). Which is, quite frankly, pretty remarkable. And at a tax rate of about 6/10th's of 1%, quite affordable. Given the state's average income of $70,000, that comes to about $400 a year per taxpayer.So, is this a good deal?Depends, no?I'm ambivalent as to its likely result:On the one hand, as it relates to encouraging folks to at least discuss the idea of long term care (and insuring it, obviously), raising awareness, I think that can be good.What I'm afraid of, though, is that it will give folks a false sense of security as to the need to self-insure. I see this quite a bit with folks who think "oh, I don't need LTCi, Medicare will pay for it."Uh, no, no it won't.But a lot of folks believe that it does. And I'm concerned that folks will think that this is indeed Long Term Care insurance when it's not even really Short Term Care coverage.On the gripping hand, it may well be all that many (most?) Washingtonians want, or need, or even qualify for.

Then here's this: proponents say that "[a]ll working people will pay into the fund through a payroll tax and then be able to claim a benefit when they need it."

Oh, really?

Then what happens if I pay into the plan for 20 years, and then decide to retire to Florida?

Wednesday, May 15, 2019

Canada is the best example not to follow.They tell the drug makers what they will pay for a drug under the threat of creating their own clone then dumping it on the world market for pennies of the originals cost. No one gets new R&D in that "business" model. It's pure theft.

So as one might imagine, this has become something of a hot topic of late. I knew we should blog on it (for all the obvious reasons), and since it's in the P&C world, I wanted to be sure that I had a firm grasp on as many of the issues as possible.

To that end, I turned to my colleague Teresa S, and we had a nice (long) chat trying to identify those issues (as best we could).

Beyond the obvious (wrongful death and medical and funeral expenses), there's counseling, biohazard cleanup, and destruction of property; in some cases, relocation and rebuilding expenses might also come into play. There's also business interruption and even Public Relations, and let's not forget off-site coverage (if the business or organization needs to rent temporary facilities). This is not, of course, an exhaustive list.

Who and what, exactly, are being insured is also important: the institution/organization, of course, but also boards of directors, Elders, etc.And who's eligible for coverage becomes an issue: members or students, of course, but what about guests or employees?

Generally speaking, commercial liability policies will have a list of exclusions; items not on this list are then usually covered. Typical exclusions might include acts of war and/or terror, or even more specifically mass casualty events. Which latter begs the question: what does mass casualty mean?

[ed: Turns out that, much like Tootsie Pops, the magic number is 3]

The folks at World Wide Facilities sent along a very helpful guide to their program, which includes some nice features. One thing that Teresa pointed out was that regardless of whether or not one's current commercial liability insurer even offers this coverage, it may be worth considering this kind of stand-alone plan in addition to or instead of adding coverage to the current plan.

And, of course, what kinds of establishments might be looking for this coverage (or, maybe more critically, should be considering)? That would include:

Schools Hotels

Religious Organizations Restaurants and Bars

Hospitals Sports/Recreation/Entertainment venues

Municipalities Events and Concerts

Retail

Whew!

Coverage limits are generally measured in the millions (or even tens of millions). One thing I liked about World Wide's brochure was that the application itself provides a great deal of helpful hints about what to be considering:

■ Is there an on-site security detail?

■ How far away is the nearest police and/or fire department?

■ Is there an emergency preparedness plan in place, and who knows what it is (or even knows that it exists)?

■ Are there regular security drills?

And more.

The
bottom line, of course, is that it's a lot easier (and more cost
effective) to consider these issues and this coverage before an
incident. As usual, we recommend speaking with your own agent to
determine what coverage (if any) is already in place, and what's
missing.

Monday, May 13, 2019

So got a call the other day from a couple looking for health insurance. Well, Karen was; Carl is on Medicare. Karen's 63, and a cancer survivor (Yay!!). Their current, grandfathered Anthem plan sports a $5,000 deductible, and runs about $540 a month, and that's become something of a budget burden for them. They reached out to me to see if they could get something cheaper.

After determining that they're not eligible for a Special Open Enrollment, I explained that there's not a lot that we can do for them. Yes, there are cheaper alternatives, but they're either underwritten, or exclude pre-existing conditions (or both), or offer much more limited benefits than their current plan.

Out of curiosity, I looked at the 404Care.gov site, and saw that the least expensive offering there featured a $7,900 deductible (almost 60% higher than their current plan), and cost almost $640 (about 20% higher than their current plan). They would almost certainly qualify for a subsidy, but that, too, is a moot point until the Fall.

I felt bad explaining to them that, as frustrating as it is, their current policy is the least bad alternative (at least until the next Open Enrollment period). I truly hate that, but I couldn't in good conscience recommend any other plan.

Thursday, May 09, 2019

Did my usual pre-screen, which includes height, weight, any meds, any tobacco use, and the like; based on his answers (including no tobacco use), gentleman seemed to qualify for a preferred non-smoker rate. And so we submitted the application and arranged for the paramed exam. All very cut-and-dry.

Until I got back the approval .... at Preferred Smoker class.

Hunh?

So I thought "oh, he vapes or maybe had a cigar the day before." But when I called, he said no, had quit smoking years ago, but when he gets anxious he sometimes pops some nicotine gum.

Hunh.

So I called the underwriter, who said, based on the lab result, my guy's "popping that gum" a lot; enough, in fact, to kick him into tobacco use territory.

But Henry, you object, he's not using tobacco, he's just chewing some nicotine-laced gum.

This past weekend, I had an interesting conversation with a doc who specializes in pain management and is a big fan of CBD oil and its pain-reducing abilities. He also claimed that taken topically (ointment) or even orally, one would likely not get flagged on a drug test.

I questioned this, in part because of my client's recent tobacco/nicotine experience. One of the questions on life applications is about marijuana (among other drugs) and/or extracts thereof. So I again reached out to my primary carrier's underwriter to see what he had to say, and he graciously replied:

"If the applicant is taking CBD oil, it should be noted on the application as we ask if they are taking any medication, prescribed or not. The drug testing results should be negative if they are using CDB oil.

Our concern certainly is if they have chronic pain and we would rate for this impairment."

Which, to be fair, I hadn't even considered. So it turns out that my doc friend was right about red flags for the oil itself, but the underlying impetus for its use would be a concern. And, of course, it is a med, so needs to be noted on the application.

This was the culmination of the process, wherein I got to keep my promise to George. It is at once the worst part of my job (losing a client) and the best (bringing a check).

Yesterday, I learned of the recent death of another client: Bob had some medical issues, and was far from a spring chicken, but he was a patient, kind and friendly gent, with a ready smile and a quick wit. When we met back in '15, he said that he wanted to take care of his (much younger) wife should he pass away. His health precluded a "regular" underwritten plan, so we chose a Guaranteed Issue one from the wonderful folks at Gleaner Life. This underwriting process asked only for a pulse and a check, but had very limited death benefits for the first two years.

Since it's now 4 years later, no such restrictions apply, and so Beth will soon be receiving a check for $25,000.

Out of the blue.

Hunh?

Well, it turns out that Bob had chosen not to tell her about his purchase, and she only figured it out going through some of his paperwork and finding the policy and my card. So I was fortunate to provide a substantial, and welcome, surprise.

Monday, May 06, 2019

May is Disability Insurance Awareness Month, and as usual we'll be featuring posts about this important coverage throughout it. Here, for instance, is an online calculator, courtesy of MassMutual, to help folks try to get a handle on how much coverage they really need:

Friday, May 03, 2019

■ As we see the effort to implement Medicaid For All (M4A) continue ramping up, it may be instructive to see how well the concept works in the real world. Case in point: Singapore. As Ari Armstrong explains:

Wednesday, May 01, 2019

May is Motorcycle Awareness Month! Motorcyclists are about 27 times more likely than passenger vehicle occupants to die in a motor vehicle crash, and 5 times more likely to be injured. #SharetheRoadpic.twitter.com/iLJJion2Xm

“Lots of factors are at play when it comes to high
healthcare costs. But doctors are sure of one thing: They aren’t to blame.

Physicians instead point to pharmaceutical and insurance companies as the source of high costs, according to
a new survey from the University of Utah Health.”

This seems counter-intuitive: of course Doctor’s are to
blame because that is who the patient pays for medical care. Yes you, the
patient, pay the Doctor for your portion of the appointment, but the Insurance
Company determines what is the patient’s portion.

There has been much discussion lately about making the
cost of health care transparent. Most of that discussion revolves around the
physician appointment and the physician charges but very little revolves around
the part Insurance Companies play in determining the cost of healthcare.

To understand how vital a role Insurance Companies plays
in healthcare costs, one must understand the relationship between the Provider
and the Insurance Company. The Provider agrees to see all the patients in the
Insurance Company’s Panel for a certain reimbursement for each Procedure Code
that is billed. The Insurance Company agrees to list the Provider as an “in
network” Provider and promote that Provider to their panel.

The Provider is given a list of select Codes and the
reimbursement for each. Usually, the provider does not know what the
reimbursement will be until the payment comes in. Since the provider does not
know the exact amount he/she will be paid, charges are set high enough to
ensure full payment from the various insurance companies with which the
Provider is contracted. The standard charge is set at 150% or more of the
Medicare Fee Schedule.

So, a Provider sets a charge high enough to get full
payment and the Insurance Company pays the Provider, then why doesn’t the
Provider know what the patient will pay. There are two factors:1) The
reimbursement from the Insurance Company is always less than the charge (this
is known as the write off) and 2) In the Insurance Contract between the
Insurance Company and the Patient is defined Patient Responsibility of the
cost. This includes a Deductible, Co Payment, Co-Insurance, Out of Pocket, Cost
Share and a plethora of other terms to break up the Patient’s Responsibility.
Based on all these breakouts, it is impossible for the doctor to know what the
patient will end up paying.